Greenspan thinks Greece will inevitably leave the Eurozone Editor

Greenspan thinks Greece will inevitably leave the Eurozone

Editor

Former Chairman of the U.S. Federal Reserve Alan Greenspan (Chairman from 1987 to 2006) was quoted in a recent BBC news report [1] :

“ I don’t think it will be resolved without Greece leaving the Eurozone .. I think .. [Greece] .. will eventually leave. I don’t think it helps them or the rest of the Eurozone – it is just a matter of time before everyone recognises that parting is the best strategy … The problem is that there is no way that I can conceive of the euro of continuing, unless and until all of the members of Eurozone become politically integrated – actually even just fiscally integrated won’t do it. “

Mr Greenspan also said: “All the cards are being held by members of the Eurozone.” He warned that trying to hold the 19-nation euro bloc together “is putting strain on everybody”. He said as well as Greece leaving the Eurozone, there was a real risk of a “much bigger break-up” with other southern European countries forced out.

As commented by Prof Bill Mitchell in one of his recent blogs [2], “ … the unwillingness (and impossibility) of the Member States to surrender their national identities and become ‘states’ within a federal Europe, with full fiscal responsibility being ceded to the federal level under the care of the a democratically elected federal government is the reason the Eurozone remains in crisis and cannot generate sustained economic prosperity. Greenspan is correct on that point. …. We knew it during the Maastricht deliberations in 1991. We have known it ever since then. The crisis proved what we knew is correct. “